Tag: Sales 

How Hotel Sales Performed in Q3

Today’s global travel sector, which many characterize as being “on the brink of collapse,” is simply unprecedented.  Seven months into a 100-year worldwide pandemic which caused a swift, wide, and deep economic recession has decimated key travel and leisure related industries including airlines, car rentals, cruise lines, ridesharing, and tour operators.  While stock markets have rebounded to near record levels, the US lodging industry continues to experience crippling stress as travel demand, which has experienced a sharp and sustained decline, continues to significantly lag pre-pandemic levels.  Although most segments of lodging demand came to an abrupt halt during the COVID-19 crisis, hotels located in urban markets, particularly group and meeting/convention-oriented properties, have been most negatively impacted and will likely take the longest period to recover.

The LW Hospitality Advisors (LWHA) Q3 2020 Major U.S. Hotel Sales Survey includes 12 single asset sale transactions over $10 million, none of which are part of a portfolio. These transactions totaled $829 million and included approximately 2,700 hotel rooms with an average sale price per room of $306,000. By comparison, the LWHA Q3 2019 Major U.S. Hotel Sales Survey identified 40 transactions totaling roughly $3.725 billion including 13,100 hotel rooms with an average sale price per room of nearly $283,000.  Comparing Q3 2020 with Q3 2019, the number of trades decreased by approximately 70 percent while total dollar volume declined roughly 78 percent and sales price per room increased by roughly 8 percent. 

Noteworthy observations include:

  • Three trades occurred in California and two sales transpired in the States of Arizona, Massachusetts, and New York.
  • Five trades were consummated for $100 million or more each.
  • Two trades transpired for greater than $700,000 per unit. 

The Q3 2020 Major U.S. Hotel Sales include:

  • Acorn Development LLC, an Amazon subsidiary, acquired from Blackstone the 299 key Residence Inn by Marriott Arlington Pentagon City in Arlington, VA for $148.5 million or nearly $500,000 per unit.  Amazon plans to demolish the 24-year-old high rise hotel and incorporate the 1.5-acre site into their HQ2 PenPlace Development. In mid-2019, the seller, Blackstone, purchased the property for $99.1 million from Host Hotels & Resorts, Inc. (HST). The latest transaction represents an approximate 50% profit within one year for Blackstone.   The current trade is remarkable in that Amazon’s HQ2 plans were widely known when HST sold the asset to Blackstone last year.
  • Magna Hospitality Group purchased the 310 key Embassy Suites by Hilton New York Manhattan Times Square in New York, NY for a reported purchase price of $115.1 million or roughly $371,000 per unit.  The seller, Ashford Hospitality Trust Inc. (AHT), acquired the property in early 2019 for $195 million, representing a 41% decline in value during their 18-month hold.
  • Xenia Hotels & Resorts, Inc. (XHR) announced the sale of the 221-room Residence Inn Boston Cambridge in Cambridge, Massachusetts for $107.5 million, or approximately $486,000 per key. The sale price represents a 11.6x multiple and a 7.8% capitalization rate on the hotel’s 2019 Hotel EBITDA and net operating income, respectively.
  • A planned
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Vacation Homes Help Fuel Existing Sales Surge

Existing home sales rose again in
September and are now blowing the doors off last year’s numbers. The National
Association of Realtors® says sales of single-family homes, townhomes, condominiums,
and co-ops, rose 9.4 percent from August to a seasonally adjusted annual rate
of 6.54 million units in September. After four straight months of increasing
sales, the seasonally adjusted rate is now 20.9 percent higher than in
September 2019.

Single-family home sales rose 9.7
percent month-over-month to a seasonally adjusted rate of 5.87 units and are
now 21.8 percent higher than a year earlier. Existing condominiums and co-ops
sold at annual rate of 670,000 units, increasing 6.3 percent and 13.6 percent
from the two earlier periods.

Analysts had expected sales to
remain on a winning streak but were looking for an annual rate of 6.2 million
sales. Forecasts of those polled by Econoday ranged from 5.8 million to
6.4 million units, all falling short of the actual number.

“Home sales traditionally taper off
toward the end of the year, but in September they surged beyond what we
normally see during this season,” said Lawrence Yun, NAR’s chief economist. “I
would attribute this jump to record-low interest rates and an abundance of
buyers in the marketplace, including buyers of vacation homes given the greater
flexibility to work from home.”

The median existing-home price for all housing
types in September was $311,800, up 14.8 percent from the September 2019 median
of $271,500, marking 103 straight months of year-over-year gains. The median
existing single-family home price was $316,200, a 15.2 percent annual gain, and
the median existing condo price was $272,700, up 9.9 percent.

There were 1.47 million available homes for sale at the end of September, 1.3
percent fewer than in August and down 19.2 percent from the 1.82 million
stockpile a year ago
.  The unsold
inventory is estimated at a 2.7-month supply at the current sales pace, down
from 3.0 months in August and 4.0-months in September 2019. A six-month supply
has traditionally been cited by NAR as a balanced market.

“There is no shortage of hopeful,
potential buyers, but inventory is historically low,” Yun said. “To their
credit, we have seen some homebuilders move to ramp up supply, but a need for
even more production still exists.”

Sales in vacation
destination counties have seen a strong acceleration since July, with a 34
percent year-over-year gain in September. Yun says, “The uncertainty about when
the pandemic will end coupled with the ability to work from home appears to
have boosted sales in summer resort regions, including Lake Tahoe, mid-Atlantic
beaches (Rehoboth Beach, Myrtle Beach), and the Jersey shore areas. Additionally, a recent NAR study
confirms that many Americans continue to seek new living situations
due to the pandemic.

Properties typically remained on the market for
21 days in September – an all-time low – seasonally down from 22 days in August
and from 32 days in September 2019. Seventy-one percent of homes sold in September 2020 were on the
market

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Sales Vacation Protocol

Ordinarily, this is advice better suited for June when planned vacations are appearing on the summer horizon, but these days, as my friend Jim pointed out, every day is Saturday and as such all bets are off, so …

We all need time off. Although many of us, myself included, operate well — and perhaps best — in a chaotic environment, pulling the train into the station and jumping off helps reset stress levels and remind us of what we were like prior to a career in sales. You know, like normal people.

But while vacation time is an employee benefit for some, it could be argued time off is a penalty for salespeople. Normal folks work for a salary. We are paid according to our success. It’s hard to make money while sitting on a beach chair reading the latest John Grisham thriller. I remember when I first started working for the Titanic Trade Association, I was told I had three weeks vacation in two weeks worth of personal days. Five weeks? Seriously? What the hell am I going to do with five weeks off? That was more vacation time than I had taken in the previous 15 years!

Still, it’s important to get away to calm down. At the same time, you want to be able to get back in the saddle quickly on the other end so that you can increase your sales levels back to where they were when you left. Here’s how …

Make three lists:

  • The first list is called, “Before you go.” Here, you list all of the actions and activities that need to get accomplished prior to walking out the door.
  • The second list is called, “While I’m away.” This is a list of anything your CSR (or whomever is covering for you while you’re gone) needs to know.
  • The third list is called, “Upon return.” You’ll never guess what that list is for.

Just like my sales tip, “Never leave today without having tomorrow planned” allows you to shut down for the evening and be present to your family, following this vacation protocol gives you a chance to take a break and not spend your time thinking over all the things that need to get done.

Done right, you can get the rest you need and get back to the job you love quickly and efficiently … just like normal people.


100% of Bill’s coaching clients see sales growth. Contact Bill Farquharson through his website, BillFarquharson.com or 781-934-7036.

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Mansion Global Daily: Luxury Sales Bounce Back in Florida, Vacation Markets See Increased Demand, and More

Luxury Sales in South Florida Rebounded Sharply, Driving Prices Higher

The median luxury house in Miami sold for $1.94 million, up more than 30% over last year. Read More

BY THE NUMBERS


TRENDING TODAY


LISTING OF THE DAY


A New England-Style Home, Built in 1840, in the U.K.’s Kent

The property, set on three acres, features several outbuildings. Read More

TAX TALK


Which U.S. States Charge Property Taxes for Cars?

Connecticut, Virginia, Mississippi and Rhode Island are among the states that levy taxes on vehicles. Read More

NEWS BITES

Penthouse at Hong Kong’s St George’s Mansions Sells for HK$238 Million

A 3,330-square-foot penthouse with a 2,933-square-foot balcony at the St George’s Mansions project in Kowloon, Hong Kong, has sold for more than HK$238 million (US$31 million). The home was the second-most-expensive deal in the past three months in Hong Kong. The St George’s Mansions project has three 20-story buildings surrounded by luxury villas and thick greenery. South China Morning Post

U.S. Vacation Housing Markets See Increasing Demand

Traditional vacation housing markets across the U.S. have seen an increase in demand from buyers who have the flexibility of working from home, according to data from Zillow. Page views on the site’s listings are up nearly 50% year-over-year in September in metro areas typically considered vacation destinations, compared to a 37% increase in page views nationally. Vacation destinations are defined as metros with at least 65,000 people and five times more vacation homes than the U.S. as a whole. World Property Journal

Frank Lloyd Wright-Designed Illinois House Sells for More Than $2 Million

The only Lake Forest, Illinois, home designed by Frank Lloyd Wright sold last week for $2.075 million, within 10 weeks of listing. Completed in 1953, the house sits on a nearly two-acre parcel with a 4,300-square-foot house that mimics a yacht. The house is among the largest of Wright’s Usonian designs and one of the only ones to originally include staff quarters. Patch

Former Los Angeles Home of Late Lakers Owner Jerry Buss Changes Hands

The former home of late Lakers owner Jerry Buss in the Bel-Air neighborhood of Los Angeles has sold for $5.35 million. The buyer is “The Real Housewives of Beverly Hills” star Sutton Stracke. Built in 1938, the Georgian-style house has 4,400 square feet of living space with four bedrooms and five-and-a-half bathrooms. Buss, who died in 2013 at age 80, owned the house until 1984, when he sold it for $775,000. Los Angeles Times

AROUND NEWS CORP

Welcome to Newburyport, Where Million-Dollar Homes Are Flying Off the Shelves [The Wall Street Journal]

The French ‘Timeshare’ Bombshell [The Times of London]

Fred Astaire’s Old Park Avenue Pad Hits the Market for $4M [New York Post]

Germs, Be Gone! 7 Simple Renovations to Coronavirus-Proof Your Home [realtor.com]

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